1. a decrease in profit - This is correct because increased competition often leads to price competition, which can erode profit margins for producers.
2. an increase in price - This is not necessarily true. Increased competition can lead to price competition, and in some cases, prices may decrease due to producers lowering their prices to attract customers. However, in certain situations where competition is intense or demand is high, prices may increase if producers have the power to raise prices and still maintain demand.
3. a drop in demand - This is not necessarily true. Increased competition can lead to improved quality, better marketing, and lower prices, which can actually increase demand. However, if producers are unable to differentiate themselves or meet the changing needs of consumers, demand may drop.
4. a rise in taxes - This is not directly related to increased competition between producers. Taxes are determined by government policies and factors such as fiscal needs, economic conditions, and political decisions. Increased competition may indirectly influence tax policies if it leads to changes in the overall economic landscape, but it is not a direct consequence.
Increased competition between producers of a good may lead to
1.a decrease in profit
2. an increase in price
3. a drop in demand
4. a rise in taxes
1 answer